'A hunting licence' for new ideas

The 2020 summit is a "hunting licence" for new ideas to confront
the economic challenges the country faces in the future, federal
Treasurer Wayne Swan says.

Mr Swan is co-chair with former Westpac boss David Morgan for
the summit's economic stream - the future of the Australian
economy.

Opening the meeting of 100 delegates, Mr Swan said he liked to
think of the gathering in traditional Treasury terms.

"They have a term in the Treasury when it comes to the budget
formation called a hunting licence," Mr Swan said.

"This weekend is a hunting licence for new ideas."

He said it was an opportunity to assess the challenges and
opportunities that will give Australia success in the global
economy of the future.

"It is an opportunity to stretch out together the economy we
want for 2020 and how we as a country put in the hard yards to get
there in the long term," he said.

"For me, it is a welcome weekend away from the those very
lengthy ERC (Expenditure Review Committee) meetings which my
colleagues and I, Lyndsay Tanner and a number of others here at the
conference, are going through at the moment."

Mr Swan's first budget is due to be handed down on May 13.

Mr Swan said the major headwinds for the economy are an ageing
population and climate change as well as the rise of China and
India on the global stage.

"Associated with that is a once-in-a-generation commodities boom
that has seen our terms of trade hit a 50 year high," Mr Swan
said.

"The recent contract prices for coal and iron ore suggest there is
much more to come, so our terms of trade are likely to increase
more in the coming year than they have in any year since the boom
began."

He said this had important implications for the discussion of
economic policy in 2020, because of the implications of having a
persistently high terms of trade.

"I think by 2020 the main question that should be asked by this
generation of policy makers should be this: what do we do with the
proceeds of the boom, what did we do with them back in 2008, did we
waste them, or did we invest them wisely in the future prosperity
an opportunity for our nation," he said.

"That should be our central focus as we debate the shape of our
economy, where it will go in 2020."

Mr Swan said the question that should be asked is how to create
"a nimble, more adaptive and more flexible economy" to take
advantage of a changing global environment.

"From my own personal point of view, I think the best contribution
for a strong economy in 2020 will be a more efficient, fairer and
more rewarding tax and welfare system, I think that is critical,"
he said.

"A system that doesn't give to Australians, or take from them, one
cent more or one cent less than they deserve, that strikes the
right balance between those that need a hand and those who
don't."

He said the business tax regime needs to be internationally
competitive that gives everyone, "from lunchrooms to boardrooms",
the incentive to work hard, upgrade their skills and save for their
retirement.

"That's my view, but let me repeat - this weekend is all about you
and your ideas for Australia."